Guaranteed Rent, often referred to as Rent to Rent, occurs when a person or business purchases a lease on a property from a landlord for a set length of time and promises to pay the landlord a set rent amount. The landlord authorises the third party, referred to as “the Renter,” to lease the property to subsequent renters. They become responsible for paying the rent along with the Renter.
There are numerous legal methods for subletting a property, most of which involve corporate or commercial tenancies, management contracts, leases, or guaranteed rent arrangements.
Everyday, landlords are growing more concerned about the possibility of protracted voids and rental arrears as rental demand declines in the UK’s major cities and job losses and financial instability rise as a result of the epidemic. This is fueling an increase in interest in guaranteed rent programs and its alleged advantages, with providers offering to give a consistent, guaranteed rental revenue and remove the danger of voids, arrears, and evictions for landlords.
What are the benefits of Unlock Guaranteed Rent?
In accordance with this guaranteed rent initiative, the landlord transfers ownership of their rental property to a business, organisation, letting agent, or individual for a predetermined amount of time in exchange for a guaranteed monthly income (irrespective of whether the property is in use or the renters are in arrears).
The person or business that rents the property from the landlord controls the property and tenancy and sublets it to renters. The intermediary tenant manages everything, and there is no direct communication between the renters who live there and the landlord.
#1 Landlords’ interest in the rent-to-rent option is rising for a number of reasons, including the fact that it is the most “hands-off” choice for landlords who don’t have the time or desire to participate in any aspect of the lettings process. It guarantees a regular, consistent income flow and reduces the chance of having to manage debts.
Also, a smaller danger exists in having to initiate legal eviction procedures and less risk exists of needing to deal with damage and repairs.
#2 Another advantage is that if the property is being rented via the local government, the landlord will be assisting in the provision of housing for people who are most in need and at risk, which makes a significant beneficial contribution to the neighbourhood.
There are no void intervals for landlords because they receive paid from the intermediary renter even when the property is vacant. For landlords with previous experience of arrears and evictions, the economic appeal of guarantee rent schemes can be very alluring.
#3 Guaranteed rent insurance can also help maintain the money coming into your rental company smoothly. Unforeseen circumstances like if your tenant becomes disabled or ill and is unable to work, or if they unexpectedly lose their job, or if they must move to a different city immediately or maybe get married and moves in with their spouse, can make you lose out on your rental income even if you thoroughly interview and check out every potential tenant before leasing out your property to them. However, the one thing that can prevent these kinds of circumstances from hurting your bottom line is rent guarantee insurance.
Concluding Thoughts on Unlock Guaranteed Rent for UK Landlords
Our leasing solutions at Property Guarantee Group offer value at each step of the letting process. We can provide landlords in the UK with first-rate tenant locating and property management services.
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